The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1887-09-03
COMPLETION OF A BIG DEAL
The Baltimore & Ohio to Pass Into the
Hands of a Powerful Syndicate.
Telegraph and other Outside Business To Be
Sold, and the Line Operated as Rail-
way-Big Stroke for the Pennsylvania.

NEW YORK, Sept 2 The mysterious
movements of the stock market during the past
week, and the continued rumors from all sour
ces that some important developments were
hanging over the railroad and telegraph world,
were explained by facts which made pub
lie late this afternoon. After breaking off his
negotiations with Ives & Co, Mr.. Garrett went
TO London. where the negotiations were con-
hnued with J. S. Morgan, and to-day deal
was announced comparable in Importance with
the West Shore settlement with the New York
Central and the forming of the Reading syn
dictate to re-organize that company
Both of these dealings were carried
through by Drexel, Morgan g. Co, but in the
latter case Edward Lauterbach the most
prominent figure as a mediator between the
Gowen and Drexel interests, and in the agree
ment now made he also takes prominent place.
The contamination of the contract made to-day
was held in allegiance until his opinion was OBJ
tanned the question OF whether the sterling
loan made by the Baltimore & Ohio railroad COW
cred the telegraph system of the company.
After studying the question in all its aspects
he decided that the telegraph lines were
free from all liens, and on receiving this
opinion an agreement in the nature OF prellm-
mary contract was executed to-day. The parties
to the contract are the Baltimore Il Ohio Rail-
road Company and syndicate composed of j.
s. Morgan & Co., Barring Bros. 30 Co., Brown,
Shpley e Co, OF London; Drexel, Morgan 81
Co, Kidder. Peabody e. Co.. and Brown Bros.
& Co, OF this city, and Drexel e. Co., OF Phia-
delphia The most i'm portant point in the
tract provides that the management of the com
pany shall be placed in competent hands salts
factory to the syndicate. Who the men
are who will be satisfactory to the syndicate
cannot be ascertained but A. j. Cassatt,
the vice president of the Pennsylvania Rail-
road Company, is generally believed to be booked
as Mr.. CARROTS Satisfactory con-
tracts also 70 be made with the Pennsylvania
and Reading railroads on all business north of
Philadelphia. and with all the other trunk lines
entering New York, by which all anragonisms
will be removed and insure the permanent work
ing Of the Baltimore 81 Ohio in harmony with
the other trunk lines. In addition to these
tracts. the lines in process of construc ton from
Philadelphia to New York will be suspended
in their construction just as they now
stand, and the work on Staten
island stopped. In consideration of these.
contracts being signed, and with the control in
their hands. the syndicate agree to relieve the
railroad from its present EN- barrassment by pro
viding $40. 600. 900 with which to take MP the
floating debt This will be represented by So, 0O0,-
600 in Baltimore s. Ohio consolidated fves and
S., 900, 900 preferred stock. The floating debt
il stands, amounts to$7, 900 900, mostly in the
shape of certificates of Indebtedness, scrip and
notes. OF this amount 81. O00 900 is said to have
matured on the LIST instant
One of the parties to the syndicate authorized
the following statement as the outcome of the
contract: 1.-THE position OF the Baltimore &
Ohio railroad Ishmaelite in the railroad.
sleepin gear express and telegraph business is
given up. All the outside enterprises will be sold
60 parties to whom they will be valuable. the
Western Union will control if it does not buy.
the telegraph lines, and the Pullman Palace
Car Company will take the slice pin gear business
The express business has already gone to the
United States Express Company. The affairs
of the railroad company will De entirely reorRan-
lied and placed upon a sound financial basis"
Drcxel, Morgan Co. were in correspondence
all day with their houses in London and Pniladel-
phia, and late in the evening confirmed the
statements that the contracts and negotiations
given above had been just signed. Outside OF
the facts given above. they declined to speak.
on the extension from Philadelphia to New York
ia believed to be the keynote of the syndicate's
interest in the negotiations, and is construed to
mean that the Baltimore q OHIO railroad. when
Invested of all extraneous enterprises, will be
operated practically by the Pennsylvania rail-
road. The following has been issued by the firm
of Drexel Morgan g. Co.:
"A preliminary contract has been executed to-
day between the Baltimore & Ohio Railroad
Company. Barring Bros 81 Co, and Brown,
Shipley & Co., London, and their allied houses
this side This contract provides for the
gotation of s5, 900, 900 of Baltimore & Ohio
solidated hves. and So. 000, 900 Baltimore 81 Ohio
preferred stock, for the purpose of paying off
the entire floating debt of the company, and
placing it a sound financial basis. The con-
ditions as follows:
'.First-The verlfcation of statements, ETC.,
rs made.
"Second-That the management of the com
pany shall be placed in competent hands, salts
factory to the syndicate.
''Third-That satisfactory contracts shall be
made between the Baltimore e. Ohio and the
other roads for New York business, which shall
remove all antagonism between them the
subject and insure the permanent working of
the Baltimore & Ohio Ia entire harmony with
the other trunk lines; also, avoid construction
or threat of construction of expensive parallel
lines north and east of Philadelphia.
THE houses interested on this side are Drexel,
Morgan & Co, Drexel & Co. Brown Bros, and
Kidder, Peabody q Co."